I'm buying a development property. How can RationalFX help?
When buying overseas property, you’ll have to make one or more international money transfers to complete the purchase.
This requires serious planning, especially if you are buying a new development ‘off plan’ where you will be required to make a number of ‘stage payments’ during the construction of your property.
For illustration purposes let’s assume that you’re a US resident buying a holiday home in France .
The developer will require an up-front deposit in Euros and then further ‘stage payments’ during construction over the next 18 months with a final payment upon completion.
Although you will know the price of your property in Euros, the actual cost in Dollars will be determined by the exchange rate you obtain. If the Dollar strengthens during construction the cost will decline, but if the Euro strengthens, then your costs will increase i.e. a stronger Euro means your overseas property will be more expensive. As a result, until you’ve secured an exchange rate, you will not know the final cost.
Whether you’re buying in Spain , France , Canada or any other country the principles are the same.
To eliminate this risk, many of our clients buy a ‘forward contract’. This is essentially a ‘buy now pay later’ option, allowing you to lock into an exchange rate, even if you don’t have all the funds available. Should the rate get worse, you will not be affected.
If however you have access to all of the funds from the start and want to convert them immediately, you can enter into a ‘spot contract’. Unlike a forward contract this is a ‘buy now pay now’ option, and you will need to arrange the immediate transfer payment for the full value of the currency bought or sold to RationalFX.
To discuss which strategy is right for you, call our Private Client Team on +44 (0) 207 220 8181.
Overseas mortgage payments. Can RationalFX help?
If you are taking a foreign mortgage to help fund your overseas property, you may be interested in our Regular Payments Abroad service which removes the stress organizing regular currency transfers can create. We can help you fix the exchange rate for up to 24 months into the future and organize your international money transfers over the entire period in a matter of minutes. With RationalFX there are no bank charges we we send your money via direct debit, saving you up to $600 each year and the process is fully automated so you’ll never miss a payment.
What are the benefits of registering with RationalFX?
Our goal is to make sure you have all the right information and tools you need to get the best exchange rate and protect yourself from currency risk. Registration is free and allows us to open a trading facility for you. Once registered, there is no obligation to trade, but it does allow you to call us for help and guidance. You’ll also get access to our latest market reports and information.
